Friday, July 18, 2008

Customer Satisfaction - It's All Relative!

For eBay sellers, the feedback rating has always been a standard of customer satisfaction. Prior to May of 2008 (before neutrals were counted as negs) many a seller was proud of their 100% feedback rating.

But, how do these ratings on eBay compare to the rest of online ecommerce? According to Forsee's American Customer Satisfaction Survey, the #1 online retailer is Netflix, with a rating of ... drum-roll please ... 86% on a 100 point scale. How can that be? That rating would get you kicked off of eBay ... well not exactly.

eBay Feedback ratings give the customer 3 options in rating a purchase; Positive, Neutral and Negative (not really a complete survey on the subject) so the ratings are certainly going to be higher because of the limited choices.

The Forsee survey on the other hand takes a detailed scientific approach: "Because online satisfaction is such a vital metric, ForeSee Results measured the top 100 online retailers using the methodology of the University of Michigan’s American Customer Satisfaction Index (ACSI)...

The ACSI’s customer satisfaction methodology is a forward-looking analytic that can predict a retailer’s future success. Because the most critical success factor is future sales, online or offline, ForeSee Results also measured and reported on purchase intent for each of the Top 100 retailers. The ACSI methodology can show how likely people are to recommend and purchase (online or offline), giving web retailers a tangible way to quantify the contribution of the web channel on overall business goals, critical information whether the retailer is a pure play or a multichannel company."


So you really can't compare the two, right? Well not until Buy.com began selling on eBay.

According to the Forsee survey, Buy.com has a rating of 72, a far cry from the #1 spot of Netflix at 86 (Amazon has an 83 and Zappos a 78) but on eBay, Buy.com's feedback rating is a lofty 99.

Buy is the same company, selling the same product on eBay, as on its website and eBay customers are notoriously high maintenance, much more so than regular online shoppers, so how do we make a comparison? We really can't, because any comparison reveals that eBay's feedback rating is worthless as an indicator of customer satisfaction. It really isn't even an effective method for differentiating sellers.

I can understand management's switch to DSRs as a measuring tool, but with Buy.com getting 4.8's across the board on their DSRs, it make DSRs worthless as well, IMO.

So what can we conclude from this whole exercise? eBay does not have an effective method for measuring customer satisfaction and this whole "buyer experience" kick is a farce. If you can't measure customer satisfaction effectively, you will never improve the buyer experience. Sure, eBay does their own surveys of buyers to measure improvement but does any of that really corelate to Feedback and DSR's? Not likely.

Strangely enough eBay was not included in the Forsee survey results, because they are a "venue" not a retailer, it would be very interesting to see where eBay would rank in that survey.

Just my 12%

12 comments:

ms.pat said...

Ebay is known for bad programming and bad decisions. Since Jan. they've taken a course that's leading them slowly to destruction. Well, all I can think is if they're that stupid then its time to let them go and hope that in the end someone will move in to save the company. Even with all the smoke and mirrors their Q2 results showed weakness in core - a weakness they perpetrated with their wacky policies and their total disregard for the honest small sellers and their unique items. They cannot blame it on the economy - this is the type of economy where Ebay should excel with bargains from small sellers - but thats a thing of the past now. I'm just so sorry this is happening but its happening by THEIR own hand and like a derailed train I doubt anything can stop it. All the articles, all the posts and all the blogs I've read are telling Ebay something they simply do not want to hear. So be it. Most of us are moving on...and so in the end it doesn't really matter what they do with DSR's or their stupid new policies.

By the way, I have a Netflix subscription and I love it and I LOVE the company. They state their service and they stick to it! Having had a Blockbuster subscription first - the difference between the two companies is amazing! Ebay could take a lesson or two from Netflix on treating all of its customers with respect and supplying exactly the service they claim along with good respectful customer service! ;-)

www.ACEOart.net

Anonymous said...

In a nutshell, John Donahoe came in and, being the blue blood ivy league boy he is, decided he didn't like the flea market atmosphere. So he made very bad decisions to become Amazon-like instead of fortifying the good sellers and buyers and kicking off the really bad. Feedback did help sort out the good from the bad. You learned to read between the lines when reading people's feedback (Toolhaus helped).

Anyway, who knows where this will all end. I predict JD goes. It will certainly be interesting.

I also started out with a Blockbuster subscription and they began making different decisions, like curtailing the amount of DVDs you could check out at their stores per month and NOT having the DVDs in stock online (having long waits for popular movies.) I switched to Netflix and use the Redbox's and I'm very happy.

Thanks Randy for all your great blogs! You're always right on topic.

Tony P. said...

Being a student of two things that I like to call Logic and Common Sense, ebay definitely causes me to wonder if I have gone totally insane, at times. The rest of the time, I know that I am.

Anyhoo, the only real (logical) question is, does ebay believe their own BS? Anyone with a lick of common sense (is that a Southern expression?) can smell the BS thru their monitor.

We just want to know if ebay knows it's a steaming pile??? Or, are they that dense? Did they actually put the Good Marks at 4, but require better than that, on purpose?

Of course they did. No one could be that stupid. Not even a Haaarvaaard grad. Could they?

Hell, I'm surprised the DSR's work as well as they do (being the POS they are). It's a frickin' wonder we're not looking at Good/Bad splits in the 4.99 versus 4.91 range.

If they removed the ambiguity of that 4=good and 4=crapped-upon, that is where we'd be, splitting hairs. Ooh, ooh I gots a 4.94... I'm ski-rooed and BM is gonna take a BM all over me.

Their 'scientific' approach to quantifying a buyer's positive experience makes me think of a Stephen Colbert type of question. Ya know, "Bush... Great president, or Greatest?".

John Donahoe... Great CEO, or Greatest? (and his mommy can't answer!)

Rich said...

When I think of eBay and egality I keep falling back on the tried and true Orwell quote from Animal Farm:"All animals are equal, but some animals are more equal than others [Buy.com]..."

These days a seller needs to be objective about the narrowing usefulness of eBay and fit it more specifically into his needs.

Re feedback-[Sorta quoting Sally fields]: "They used to like me, they really used to like me!"

Rich said...

Me again. [Excellent assessment of the reality of the eBay FB system and the bogus propping up of the big guys like Buy.com].

When you cruise the various eBay and eBay-related forums there is much "questioning" and/or bewilderment as to the "fairness" of various eBay activities.

Life ain't fair. Caveat Emptor [and the seller too!]

Randy Smythe said...

Rich,

You are absolutely correct, that "life ain't fair".

eBay is just another marketplace now. Use it if it benefits your business.

ms.pat said...

Am I the only one who thinks BM is pure nonsense? Kind of like telling sellers "you're gonna get a whippin if you don't walk the straight and very narrow"? I know of no other business that deliberately hides merchandise from the buying public. I can understand wanting a tool to use against bad sellers BUT this tool benefits nobody...not the sellers, not the buyers...not Ebay. Instead of "enhancing a buyer's experience" it continually frustrates them and instead of keeping sellers honest...its helping to drive them off! I'm just amazed at the sheer stupidity.

nadine said...

If you can't measure customer satisfaction effectively, you will never improve the buyer experience. Sure, eBay does their own surveys of buyers to measure improvement but does any of that really corelate to Feedback and DSR's? Not likely.


It's rather clear from their behavior that Ebay managment thinks it has good metrics, which it plays close to the vest and won't share with the 'community'. That would be giving away the managment's secrets, what they regard as their value-add to the enterprise.

DSRs are for PR and to drive the great unwashed hordes of sellers in a certain direction.

ms.pat said...

Hmmm....even the great unwashed hordes of sellers drum up revenue. I believe ebay can do the weeding out without disillusioning the good sellers they need. This is something they should have been doing from day one. The whole concept of what they're doing to try to week out bad sellers and bring in buyers is stupid and even wall street is beginning to catch on to it. As for Ebay's metrics - of course they keep them a secret - if logical thinking people got hold of it they'd pull it all apart and show it for the nonsense it really is. All goes back to bad management. Its like GIGO "garbage in, garbage out"!

Randy is right - empower your sellers and then get out of the way! If they get in the way any more (and they unwisely intend to) the whole thing is going to fold like bad magic!

Anonymous said...

Default BM is not the problem. Amazon calls it "relevance" and it is the default search. The problem is ebay has so screwed up the BM roll out. What will happen once ebay goes to near free listings and the site is flooded with millions of DUPLICATE listings? Ebay will try to switch to amazon style catalog listings but i can only imagine the mess that will be starting a catalog from scratch.

Based on ebay's track record rolling out new features, I have ZERO confidence ebay will be able to pull it off.

Randy Smythe said...

Anonymous, The one big difference is that Amazon doesn't disadvantage sellers in their search.

Buyers find their product via relevant search than Amazon shows them the best prices.

You are 100% correct about the catalog search which is coming by the end of the summer. It is going to be a mess.

Randy Smythe said...

Anonymous, The one big difference is that Amazon doesn't disadvantage sellers in their search.

Buyers find their product via relevant search than Amazon shows them the best prices.

You are 100% correct about the catalog search which is coming by the end of the summer. It is going to be a mess.